Eurasia Mining’s (LON:EUA) permit for its West Kyltim project has given the company a big shot in the arm.
Indeed, approval from Russian prime minister Dmitry Medvedev’s office came through in near record time having landed on his desk just two weeks ago.
It was the final regulatory requirement for the Urals alluvial platinum project to move to the production stage.
Eurasia now becomes the second western junior to receive a permit in Russia in the space of a month.
Three weeks ago Amur Minerals (LON:AMC) received a permit for its Kun-Manie project, the first western junior almost anyone could recall getting a licence.
Eurasia Mining’s chief executive Christian Schaffalitzky said there had been a sea change in attitudes in the country over the past 12 months .
“The Russian minerals regulatory system has improved a lot. It has been a frustrating journey certainly, but suddenly in the middle of last year it loosened up.”
Optimism was sufficient for the company to be already working on the detailed development plan required by Russia resources agency RosNedra for West Kytlim.
Exploration at the prospect, in the Central Ural Mountains, has already delineated reserves of 2,283kg raw platinum at an average grade of 288 mg/m3, the Russian method of measuring alluvial deposits.
Other details have been scarce other than it will have at least a ten-year mine life, but Schaffalitzky attributes this to a decision to wait until licensing was complete to release financial projections.
He adds, however, that the company is confident that “it will be a low cost producer with a small capital investment.”
The nuggets that contain the precious metal are found in sand and gravel river deposits that require washing to release.
It’s relatively easy access and the fact it is not a large project, with no great capital required upfront, means Schaffalitzky is also upbeat over funding.
“Financing it should be be simple,” he adds, while being an alluvial project all of the equipment is mobile, so at worst it could be rented or leased.
Production will be built up in stages, season by season, which will also minimise the upfront expenditure.
The current plan sees year one with one washing plant, a second would come on line in year two and so on until there are four in total.
The aim is to use cash flow from West Kytlim to fund other projects.
“It relieves us from the need to do fund raisings and ask shareholders for equity.
“We are looking at all finance options to start West Kytlim and now we definitely do have options as opposed to shareholder equity only, which was the case in the past.”
Schaffalitzky says there is potential for further expansion in the Urals, some parts of which are completely unexplored.
A more immediate prospect, though, is the much larger platinum and palladium opportunity at Monchetundra in the Kola Peninsula in Russia, where Eurasia’s holds an 80% interest in a licence that runs until the end of 2016.
In March, it reported it had received approaches to take a stake or even take over the licence.
Schaffalitzky says it is looking for a partner as it will require significant expenditure to develop, but is keen to move it forward.
“Monchetundra could potentially be a company maker, he says, and become very big.
“We have not had much spare money recently but we want to go back there and do some work as it’s a really nice project.”
Further afield, at the end of 2014 Eurasia signed an exploration deal with Metal Tiger (LON:MTR), which now has first refusal on any new projects Eurasia decides to move forward.
“We look at new projects all the time. Metal Tiger were interested in doing things in Russia and should we want a partner or they like the project, they have right to first refusal on anything we look at.”
And there are opportunities.
“The industry is in such a hole,” he says with the situation in Russia particularly acute, as there has been very little exploration since the end of the Soviet era.
“All of the projects that have been explored come from before 1990 with the ending of the Soviet Union, with no new discoveries in Russia since then, just the development of the projects already started.”
It may help explain how, regardless of Russia’s relations with the West heading back to Cold War diplomacy, a new spirit of glasnost seems to be blossoming for AIM’s mining juniors.